In a large skillet or Dutch oven, heat olive oil and butter over medium-high heat.
Pat chicken thighs with paper towels to remove as much moisture as possible. Add to heated skillet.
Brown chicken thighs, adding salt and pepper while cooking.
When chicken thighs are browned on each side, add basil and oregano to the pan and saute 30 seconds longer.
Remove chicken from pan and set aside. Add shallots and minced garlic to the pan and cook over medium heat for 1 to 2 minutes or until soft and fragrant. Add mushrooms to the pan and saute an additional 1 to 2 minutes until soft.
Sprinkle flour over the mushroom/shallot mixture and saute for 1 to 2 minutes.
Add sherry or chicken broth and scrape the browned bits from the bottom of the pan, simmering for 2 to 3 minutes.
Return the chicken to the pan. Add canned tomatoes, including juice, and diced bell pepper.
Bring the mixture to a simmer. Reduce heat to low, cover with a lid, and cook for 20 minutes stirring occasionally. If you would like your dish a bit saucier or if there is not much moisture from the canned tomatoes, you can add a bit of water or chicken broth.
Add additional salt and pepper to taste and serve hot over spaghetti noodles.
Parsley is not included in the ingredients list, but can be used as a garnish.