Oven-Roasted Oysters with Mushrooms and Watercress

Heat a large skillet or Dutch oven over medium-low. Add olive oil and pancetta, and cook, stirring often, until pancetta is brown and fat has rendered, about 5 minutes. Add shallots and garlic; cook, stirring often, until lightly brown and toasted, about 5 minutes. Add mushrooms and crushed red pepper; cook, stirring often, until tender, 5 to 7 minutes. Add sherry; cook until reduced by half, about 1 minute. Stir in watercress, basil, chives, and thyme; stir until wilted, 1 to 2 minutes. Remove from heat; season with kosher salt. Add 2 tablespoons of the butter; stir until melted. Transfer to the bowl of a food processor. Pulse until finely chopped but not pureed, 4 to 5 pulses.

Melt remaining 2 tablespoons butter in a medium skillet. Add panko; cook, stirring constantly, until deep golden, about 4 minutes. Transfer to a medium bowl; cool slightly, about 5 minutes. Stir in Parmigiano-Reggiano.

Preheat oven to 400°F. Line a rimmed baking sheet with rock salt. Shuck oysters; loosen adductor muscles so oysters float freely in liquor in bottom cup. Gently remove any dirt or debris, taking care not to spill the briny liquor. Top each oyster with about 1 tablespoon mushroom mixture and 2 teaspoons panko mixture. Nestle oysters into rock salt on prepared pan. Roast until bubbly and hot, 8 to 10 minutes. Remove from oven; garnish with lemon peel strips. Serve hot with lemon wedges.