Cut the bacon slices int 1/2 inch wide strips. Cook the bacon with 3 tbsp water in a medium skillet over medium heat, stirring often, until the bacon starts to crisp. Add the mushrooms and cook, tossing occasionally, until tender, 5-6 minutes.
Add the sherry vinegar and 1/4 cup water. Simmer until reduced by half, about 1 minute. Stir in the vegetable oil and season with salt and pepper. stir in the chopped parsley.