There is a special tool for M116/7 camshaft and cylinder head work. I doubt you'd damage threads using this tool.

An oily plug can mean a lot of different things, but probably means worn valve guides on a well used car with no other problems. The cylinder head has to come out to replace valve guides, and the camshaft, too, of course. And you might as well do both heads while you're at it.

Sixto
91 300SE