Fresh start- Helloworld will not compile

Howdy, starting fresh. I have followed the tutorial from here ->  (I did not import anything from Eclipse however)
I have java 1.7 and 1.8 installed however I am using 1.7.0_51
I have been building for Android 4.0, however also tested with 2.2
I select the hello world activity upon creating the project.

The classpaths are all correct and point to the right directories where things are installed.

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What IDEA version and Android SDK Build-tools do you use?
It should work fine with Android SDK Build-tools 19.0.3 and Android 4.4.2.


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