In a medium-sized saucepan, heat oil and butter on high heat. Add shallots, season with salt and pepper and caramelize. Add garlic and cook until aromatic. Add sherry and cook until liquid is almost evaporated. Add mushrooms and chicken broth, and cook for 5-6 minutes.
Add cream, cook for and additional 4-5 minutes until slightly thickened. Carefully strain liquid into another saucepan, return to high heat and add slurry, whisking constantly until thickened. Remove from heat and return mushrooms to sauce.
To Reconstitute: Soak driedmushrooms in lukewarm water for 30 min. to one hour. Rinse thoroughly when done. If cooking with soaking water, strain before using.