He's also got a gutshot draw which gives him 4 more outs and given that this is 2/3 live I'd have to say his K is probably good more often than not giving him an additional 3 outs. I can't do math, but its real close I think.
The hand is played horrendously to begin with though. Fold K7s pre or 3bet it to a proper amount. ~$20 should do the trick. Once you 3bet it to $20 it becomes an easy stack on the flop with a flush draw, over, and backdoor straight draw.
The gutshot only gives him another three outs (we've already counted 8c) but yeah, I tend to agree a straight's probably good if you hit here. That's 12 outs and 26% to hit.
We need 17 outs (37% to hit) to make the call profitable, so even counting the kings doesn't give us the right price.
I'd be erring towards the fold preflop line, unless we've got really
really good reads on our opponents and know how we're going to exploit them postflop, whether we hit or miss. Because if $2/$3 in Perth plays anything like it does in Melbourne, you can raise this to $20 and still expect at least two callers holding pretty much ATC. Also, $20 is a big chunk of our stack to be putting in on a bluff.
Since the table's only just opened and we don't have those reads, I just fold this preflop. There'll be more than enough chances to valuetown people when we hold a real hand and we don't need to go messing around with this one. Unless it's some kind of expensive and elaborate image-building play, in which case analysis is kinda redundant
As played, I fold. Villain's check-raise on the flop was pretty strong, as is his shove on the turn, and while this certainly doesn't have to be a monster we don't even beat ace high. This could be top pair, two pair, a set, a pair and a draw... doesn't matter, we're behind all of them.
I wouldn't nesc. hate three-bet shoving the flop though. Then we're more like 45% to hit and we're putting the decision back on the villain. We'll more than likely get called, but just say something like
"It's good for the game ROFLcopter" and expect to get called down light from that point on.