Delek Group said there were "strong signs of natural gas" encountered while drilling an exploration well in the South West Tamar prospect.
"It is clarified that appraisal drilling work has not yet taken place and signs of natural gas do not necessarily indicate an existence of a discovery," the company cautioned in a statement.
In a September assessment, Delek said it estimated the undiscovered resource potential in the South Tamar prospect to be around 684 billion cubic feet of natural gas.
Delek discovered the broader Tamar prospect about 60 miles off the northern Israeli coast in 2009. The company said it, along with the region's Leviathan gas field, are among the largest natural gas discoveries ever made in deep waters.
Delek announced the start of drilling in South West Tamar in September. It didn't say when appraisal drilling would take place.
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