First we should be sure we are all talking about the same thing...
there are synthetics ' sheep skins' available... in fact , the padding for most saddles changed to this years ago...
If you have real sheepskin then it should be washed in Woolite.... and then placed in the position you want it to be used in.... and when dry it should be oiled from the backside with something like Lexol... although with this on the backside a heavier longer lasting oil could be used.... like Neatsfoot Oil Compound....