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in fact u can make a bit over 300 hp and about 325 ft lb. u need heads that will flow better a cam that has good lift and duration a exhaust to help scavange and you will be reving out some serious numbers form that little engine, everyone will tell u to build a 350, but 307s are cheep and respond well to upgrades. and you will be able to cruse with less of a dent in your wallet on fuel cost.
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