The blitz of tie-ups in the U.S. oil and gas industry is continuing, with Kodiak Gas Services Inc. offering to buy CSI Compressco LP in a deal that would become the largest contract compression fleet in the industry with an estimated 4.3 million hp.

The all-equity acquisition, valued at $854 million including debt, would deepen Kodiak’s position in key operating areas, particularly the Eagle Ford Shale and in the Permian Basin, where it would have about 2.8 million hp-plus within the most active basin in the country.

“The increased scale provided by the industry’s largest contract compression fleet will allow Kodiak to continue to provide the highest level of service in the industry to our customers, many of which are themselves undergoing consolidation,” Kodiak CEO Mickey...