The valves need to be set, but you have an oil problem. You should have oil dripping from the rocker arms when it's running. I see the tube that feeds the rocker arms is kinked almost closed,that's not good. If you take the side cover off, behind it is a small oil feed line that runs from the rear cam bearing to feed the oil to the rocker arms. Remove it soak it in something to clean it, blow it out with air,were it connects to the head, if you look on the outside of the head, there will be a small 1/4 inch pipe plug, take that out and clean that area with some carb cleaner . Good luck.
