Heat oil and butter in a saucepan over medium-high heat. Brown chicken on both sides then reduce heat to medium. Add lemon pepper, fennel and cream sherry. Simmer until chicken is cooked through but not dry. When chicken is cooked, remove it from the pan and set aside to cool.
While chicken is cooling, add mushrooms, red capsicum, parsley, buttermilk, light cream, water and chicken soup base; stir. Tear chicken into bite sized pieces and return them to the soup. Heat until warmed through but do not boil, mushrooms and peppers should still be firm.