Heat butter and oil in a large skillet. When hot add mushrooms and cook over medium heat until lightly browned and juices have evaporated. Do not crowd mushrooms in the pan or they will steam instead of brown.
Beat eggs, whisk in the milk. Add mushrooms, bacon, cheese, salt and pepper. Pour into a 5 to 6 cup baking dish. Set baking dish in a larger pan. Fill the larger pan with water to come half way up sides of baking dish.
Bake until knife inserted is withdrawn hot and clean, about 50 to 60 minutes.