I am having a major performance problem with minecraft!
My CPU is not being fully utilized and feels like only 1 or 2 cores are used and additionally it doesn't feel like my GTX 770 is being used as I'm getting terrible performance.
This has lead me to believe that minecraft is either eally unoptimized and/or it is using the integrated graphics in the CPU instead of the dedicated graphics.
How to re-create: Run Minecraft 1.8.7 on a PC with the same or worse specs on a creative world and fly around for 5 minutes.
Note: Giving java 6GB of RAM helped to make frame rate drops less inconsistent and increased performance by a few frame per second.
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Please describe what kind of performance issues you are experiencing, such as at what framerate the game is running. Please note that, unless you are using a discrete GPU (laptop) with Nvidia Optimus, the game cannot be using integrated graphics instead of dedicated, unless your computer monitor is connected to your motherboard instead of GPU.

It is plugged in to the GTX 770 (desktop).
As for framerates, it can drop down to 30 or so ranomly without any warning - usually when in creative flying around.
And I am using Nvidia WHQL 353.30 Drivers (the latest as of this post).
But minecraft needs general performance optimizations.
HINT: TALK TO NVIDIA AND AMD and get official drivers specifically for minecraft!

What video settings are you using in the game?

Resolution = 1920x1080
VBOs = On
Mipmap level = 4
Clouds = Fancy
Smooth lighting = maximum
Graphics = fancy
max framerate = unlimited
render distance = 16 chunks
Particles = minimal
alternate block = on
entity shadows = on
use v-sync = off
brightness = moody
view bobbing = on
3D analygraph = off
full screen = on
GUI scale = auto

Please force a crash by pressing F3 + C for 10 seconds while in-game and attach the crash report ([minecraft/crash-reports/crash-<DATE>-client.txt|http://hopper.minecraft.net/help/finding-minecraft-data-folder]
) here.

This is the forced crash file requested.

Edit: I found that minecraft decided to install Java 8 update 25 64 Bit and uses this instead!

It appears that you are running out of memory. Try allocating more memory, and perhaps removing the resource pack you have installed.

As @unknown said, you're running of of memory:
Memory: 356975504 bytes (340 MB) / 979578880 bytes (934 MB) up to 1060372480 bytes (1011 MB)
See MC-12949 for instructions how to assign more RAM to Minecraft.