The company that owns nearby mines had not previously extracted oil from shale deposits , and on hearing about new technologies that could be used to extract new minerals, made the owner of an adjacent property an offer to buy his mining rights.
I will go with C as well, very similar to
galileo-did-not-invent-the-telescope-but-on-hearing-in-111155.html.
I do not like the structure of the sentence though... I think that "minerals,
it/the company made " should be placed after the comma
(A)The company that owns nearby mines had not previously extracted oil from shale deposits ,
and on hearing
(B)The company that owns nearby mines did not previously extract oil from shale deposits ,
and on hearing
"and" does not express the correct relationship between the two parts of the sentence.
(C)The company owning nearby mines had not previously extracted oil from shale deposits , but on hearing
IMO CORRECT(D)The company owning nearby mines, while
they had not previously extracted oil from shale deposits , had heard
(E)The company that owns nearby mines had not previously extracted oil from shale deposits ,
because on hearing
D is out because uses "they" without reference, E is out because "because" does not express the correct relationship.