We demonstrate that in the weak, high porosity and almost impermeable rocks, the rock microstructure changes dramatically during hydrocarbon production and water injection. In the North Sea chalks and the California diatomites, rock damage is a phenomenon of crucial importance to ultimate recovery and profitability. There is overwhelming field evidence of ubiquitous rock damage in the diatomite. (1) Water production rate increased manifold before waterflood, i.e., the intra-particle water was released from the grains crushed by the changing effective stress. (2) Aqueous tracer breakthrough times are two-three orders of magnitude shorter than expected for flow in the intact diatomite. (3) Some newly drilled wells free-flow before hydrofracturing at rates impossible to sustain by the undamaged diatomite. (4) Surface subsidence continues at a substantial rate, despite seemingly balanced injection and withdrawal, i.e., water is injected only into few diatomite intervals and does not provide uniform pressure support. (5) Produced water is an almost constant fraction of the injected water in both fields regardless of the operator, waterflood stage, and location. (6) More water injection causes more subsidence. (7) Hydrocarbon production is an S-shaped function of subsidence, i.e., compaction remains a dominant production mechanism. The classical models of elasto-plastic rocks cannot capture the dramatic rearrangements of rock microstructure caused by fluid withdrawal and injection. New micromechanical approach is required to understand and predict reservoir behavior in the diatomite and chalk, and limit well failures.