Paul the Sheep is the sheep Carl replaced Paul with in Episode 7 after Paul moved out after Episode 6. He wears a mask of Paul's
face and hat. He can't speak.
Paul the Sheeps' first appearance was episode 7, after Paul moved out, as a replacement for Paul so Carl had someone to scold him for his latest activity (a chair made out of the faces of city council members), feeling a need for Paul's scoldings after Paul moves out.
Llamas With Hats 7 (Only appearance so far).