Fry bacon in large skillet until crips; drain on paper towels. Reserve fat.
Add enough oil to bacon drippings to make 1 inch fat in skillet. Combine 1/2 cup flour, salt and pepper in a plastic storage bag; shake to combine.
Add chicken pieces to bag; coat well. Shake off excess.
Heat fat until hot but not smoking; add chicken pieces. Brown on all sides. Reduce heat; cover and cook over low heat, turning once, for about 20 to 25 minutes or until fork tender.
Remove chicken and keep warm. Remove all except 3 tablespoons fat from skillet; stir in remaining flour.
Cook over medium heat until bubbly. Gradually pour in half and half, stirring constantly. Cook until mixture is smooth and thick. Adjust seasonings. To serve, pour gravy over chicken and garnish with bacon strips.