Preheat oven to 375 degrees F. Butter a 9 by 11-inch baking pan with the butter and set aside.

Drain the oysters, reserving the oyster liquor. Set aside.

Heat the oil in a skillet over medium-high heat. Add the onions, bell peppers, celery, salt, and cayenne and saute for 5 minutes, or until soft. Add the bay leaves, garlic, and parsley, and saute for 1 minute. Add the water and cook for 2 to 3 minutes, stirring constantly. Add the green onions, oyster liquor, and the bread cubes. Stir to mix well, and remove from the heat.

In a large mixing bowl, combine the bread and vegetable mixture with the oysters and cheese. Stir with a wooden spoon to mix thoroughly. Pour the mixture into the prepared baking pan and bake for 1 hour, or until bubbly and golden brown.

Remove the bay leaves before serving.