Repsol said it discovered a 160-foot column of natural gas in the Sud-Est Illizi block near the Algeria border with Libya, the Financial Times reports.
The company made a similar discovery in the same area in November, though its test rate was about half of that from the latest find.
Algeria has the 10th largest gas deposits in the world and is the third-largest supplier to Europe. Its exports have been in decline, however, because of lagging foreign investments, the newspaper reports.
Militants sympathetic to al-Qaida in the Islamic Maghreb stormed the In Amenas natural gas facility in eastern Algeria in January. Foreign workers with BP and Norwegian energy company Statoil were among the dead in the attack.
Algerian Energy Minister Youcef Yousfi said at an energy conference in Houston in March that his country maintains a strong position as a leader in the development of natural gas despite January's terrorist attack.