United States E&P income was $104 million for the fourth quarter of 2012, compared to $110 million in the third quarter of 2012, with the decrease largely the result of higher exploration expenses. Higher sales volumes of liquids, reflecting the Company's ongoing development programs primarily in the Eagle Ford and Bakken shale plays, were partially offset by higher DD&A and other costs associated with these increased activities.
For full-year 2012, U.S. E&P income was $393 million, compared to $366 million for the prior year. The increase was a result of higher sales volumes, partially offset by lower realized product prices, higher DD&A and operating expenses primarily associated with increased activities in the shale resource plays and higher exploration expenses. On a per boe basis, operating costs and DD&A each showed improvement by approximately $0.30 per boe.
International E&P income was $397 million in the fourth quarter of 2012, compared to $376 million in the third quarter of 2012. On a pre-tax basis, the increase reflects the impact of higher liquid hydrocarbon sales volumes and realizations and lower DD&A.
International E&P income for full-year 2012 was $1.488 billion, compared to $1.791 billion in 2011. The decrease included lower earnings in the U.K. and Equatorial Guinea, partially offset by higher earnings in Libya. Also, in 2011 the Company was not in an excess foreign tax credit position for the entire year as it was in 2012.
Total E&P exploration expenses were $238 million for the fourth quarter of 2012 and $729 million for the entire year, compared to $176 million in the third quarter of 2012 and $644 million for full-year 2011. Fourth quarter 2012 exploration expenses included $85 million of dry well costs associated with the Innsbruck prospect in the Gulf of Mexico.
EAGLE FORD: Marathon Oil's average net production in the Texas Eagle Ford shale rose 50 percent in the fourth quarter to approximately 60,000 boed compared to 40,000 net boed in the prior quarter. Approximately 64 percent of the production was crude oil/condensate, 16 percent was natural gas liquids (NGLs) and 20 percent was natural gas. For the month of January, the Company projects average production was approximately 70,000 net boed. During the fourth quarter, Marathon Oil reached total depth on 70 gross Company operated wells and brought 70 gross operated wells to sales. For all of 2012, the Company reached total depth on 248 Eagle Ford gross operated wells, an increase of approximately 15 percent from original 2012 estimates, and brought 215 gross operated wells to sales. Marathon Oil has continued to deliver a top-quartile drilling performance in the areas in which it operates in the Eagle Ford. The Company improved its spud-to-spud performance 40 percent from the fourth quarter of 2011 (35 days) to the fourth quarter of 2012 (21 days). During January, the Company improved another 10 percent averaging 19 days spud-to-spud on wells drilled in the Eagle Ford. The Company fully expects the spud-to-spud time to continue dropping during 2013 as it moves to more pad drilling.