Precision Drilling Trust (PDS) is in no hurry to convert to a corporation, at least not until 2010 when there is perhaps more visibility in Canada's drilling-rig market, President and Chief Executive Kevin Neveu said Wednesday.

"There is no pressing reason to change; the clock hasn't started ticking yet but we know the game ends at the end of 2010," said Neveu, referring the government's intention to start taxing income trusts at corporate rates Jan. 1, 2011.

His comments were made during an analyst conference call following the release of first-quarter earnings for 2009 earlier in the day.

Precision's results - showing a quarterly profit figure that dropped by almost half from a year ago - came as U.S. counterparts such as Halliburton Co. (HAL) predicted a second-quarter trough in North American drilling activity.

Precision spent US$2 billion last year to buy U.S. driller Grey Wolf, Inc., to push up its market share in the U.S. But that acquisition happened just as the drilling market started to collapse, as oil prices fell.

The Canadian-based company has been hit on both sides of the border as the global recession has undermined the demand for energy, meaning oil and gas companies have slashed or deferred spending on new wells.

Precision controls about 20% of the gas-drilling rig market in Canada.

Neveu said the U.S. drill-rig market is starting to show some bright spots, with some recovery seen in markets such as south Texas. He said these first signs of a turnaround mean the bottom of the market is nearer rather than farther away.

"We expect the bottom in the second quarter and nothing I see suggests it will be pushed out until the end of the year," he said.

The trust managed to secure C$380 million in financing Monday from Alberta Investment Managment Corp. and also announced a rights issue to shore up the balance sheet.

Precision said the goal for 2009 is to work on reducing debt and integrating its U.S. acquisition.

Precision's first-quarter earnings fell to C$57.4 million or 39 Canadian cents per unit, from C$106.3 million or 84 Canadian cents a year earlier.

The company expects demand to remain weak with prices continuing to fall.

"Precision expects this trend...to continue into the second quarter of 2009 and potentially longer depending on commodity prices," the company said in a statement.

In Toronto Wednesday, Precision is up 54 Canadian cents, or 10%, to C$5.77 on 3 million units.

Company Web Site: http://www.precisiondrilling.com

-Brian Truscott, Dow Jones Newswires; 604-669-1595; brian.truscott@dowjones.com